Manitobans will benefit from new tax cuts contained in Budget 2009, which includes increasing the Education Property Tax Credit to $650, increasing tax credits for education, research and innovation, and eliminating the small business tax next year, Finance Minister Greg Selinger announced.
Despite global economic uncertainty, Manitoba will keep its tax cut commitments for 2009 without running a deficit, Selinger said. When the tax cuts in Budget 2009 are combined with those announced since 1999, Manitobans and businesses are now saving more than $1 billion in taxes annually, the minister said.
“Some jurisdictions have gone into deficit to finance tax cuts,” Selinger said. “Our plan is different – it is about making the choice to be deficit-free while investing in the knowledge economy and continuing to make strategic, affordable tax cuts that will help maintain the purchasing power of families and the financial strength of business.”
Budget 2009 noted that Manitoba property owners and renters have received significant tax relief over the past decade, helping property taxes remain flat. In addition to completely eliminating one of the province’s two property taxes, the residential Education Support levy, the government has also increased the property tax credit by $350, from a low of $250.
Budget 2009 builds on this progress by:
• increasing the Education Property Tax Credit by $50 to $650 a year in 2009; and
• increasing the Farmland School Tax Rebate to 75 per cent in 2009, up from 70 per cent in 2008.
In addition, Budget 2009 keeps an earlier commitment to lower personal income taxes in 2009 by increasing the personal exemption for every taxpayer by $100, adding $100 to the spousal and eligible dependent amounts, reducing the lowest tax rate to 10.8 per cent and increasing the first and second tax brackets to $31,000 and $67,000. Manitoba’s new Primary Caregiver Tax Credit also began this year, saving caregivers up to $1,020 annually.
Budget 2009 also continues to cut business taxes by:
• dropping the small business tax rate to zero before the end of 2010, down from eight per cent in 1999;
• lowering the general corporate income tax rate to 12 per cent in July 2009;
• continuing with the phase-out of the general Corporation Capital Tax, on track for elimination by the end of 2010;
• extending the Manitoba Mineral Exploration Tax Credit for three more years, doubling the credit in 2009 and tripling it in 2010;
• reducing the mining tax to 10, 15 and 17 per cent from 18 per cent, depending on taxable income; and
• paralleling business tax reductions announced in the 2009 federal budget including increased depreciation rates for manufacturing machinery and equipment, and computer systems.
In recognition of the current economic challenges, the budget also commits to continuing to consult with the business community to ensure Manitoba’s economy remains strong and competitive.
Selinger said the budget recognizes the importance of investing in research, innovation and skill development by:
• doubling funding for the Community Enterprise Investment Tax Credit, which provides $17 million more in investment capital for small and medium-sized companies;
• doubling the value of shares a business can apply for under the Community Enterprise Development Tax Credit;
• introducing refundability of the Research and Development Tax Credit to corporations that work with research institutes in Manitoba on new technologies;
• expanding apprenticeship tax credits to include advanced-level apprentices; and
• extending the co-op student and graduate components of the Co-op Education and Apprenticeship Tax Credit.
To promote recycling, a Waste Reduction and Recycling Support Levy will be introduced on Class 1 landfills and phased in starting in 2009. The majority of the revenue will be rebated to municipalities that recycle, while the balance will be used to fund e-waste and household hazardous waste recycling.
Other green tax initiatives include:
• extending the Green Energy Equipment Tax Credit to include solar thermal systems in addition to geothermal systems,
• doubling benefits to agricultural producers who take action to protect riverbanks and lakeshore areas under the Riparian Tax Credit,
• making permanent the retail sales tax exemption on manure slurry tanks and lagoon liners, and
• extending the Odour Control Tax Credit until the end of 2011.
